As an owner of a single-family rental property, you are well aware of how important it is to be on top of trends in the current market. Regularly carrying out a rental market analysis is one of the greatest strategies to accomplish that. When conducting due diligence on a property you wish to purchase or when maintaining an existing property, a rental market analysis is invaluable.
You can determine an accurate rental rate for each property with the aid of a thorough market analysis, which will also provide insight into what your competitors are doing. The process of conducting a precise rental market analysis will be demonstrated in this article.
Research the Neighborhood
The first step is to gather data. This means that you should consider things like vacancy rates and average rental prices in the neighborhood. Either an online search or a call to a local real estate agent can be used to find this. You can comprehend what your competition is doing after you have this information.
In addition, it’s crucial to thoroughly evaluate the neighborhood in which your property is located, taking into account factors like the proximity of surrounding attractions, the general walkability of the region, the caliber of the schools, the availability of shopping, and more. Count how many homes appear run down or vacant and whether the streets are clean. How desirable an area is and, consequently, your rental rate, will be influenced by all of these information.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Consider factors like the square footage, the number of bedrooms, and any additional features or services that each property has to offer. A well-maintained property will rent for more than one that is dilapidated, so pay special attention to its condition as well. Walking around each property or, if they are accessible, seeing images will help you determine this.
Rental rates are influenced by factors such as age, wear and tear, and overall condition. Locating properties that closely like yours is crucial in order to obtain the most precise representation of the local rental market. At last, investigate each property and find out its current rental rate. You can find this information by searching online, speaking with the tenant, or contacting the current property manager or owner.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, obtaining the necessary information is critical. Determine the average rent per square foot—a critical step in this procedure that calls for a more thorough investigation.
Compiling the total square footage of all comparable properties and dividing it by the total number of units will yield the most accurate results. The average price per square foot for the area will be provided by this computation. Ascertaining that comparable properties share your property’s age, size, location, and amenities is crucial.
Finding the average rent per square foot will allow you to calculate the approximate reasonable rent you can charge by multiplying this amount by the total square footage of your property. A final price may differ based on the location and particular features of your property, so keep that in mind.
Adjust Your Rate as Needed
Still, a number of other reasons can also require you to modify your rental rate. You might be able to charge more, for instance, if your property is in better condition than the others. Or, you might be able to negotiate a higher rent if it’s in a more sought-after location or has unique features or facilities.
If the rental rate you may charge now will still be competitive with the market in the near future, you need also take into account the current state of the economy. Set your rental rate based on the knowledge you’ve acquired and your best judgment.
It is imperative that you conduct a market analysis on a regular basis, preferably once a year, due to the fact that the rental market is always changing. This will assist you in keeping your property occupied and ahead of the competition.
Your side is being supported by the experts at Real Property Management Resources. The most precise rental market evaluations in Yukon and the surrounding areas can be provided by us because we possess the requisite experience and proprietary industry data. For additional information or to obtain a market analysis for your property, please Contact us via our website or by phone at 405-787-4429.
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